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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 368.31+0.6%Nov 7 4:00 PM EST
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To: TobagoJack who wrote (67951)11/10/2010 2:36:33 AM
From: Hawkmoon2 Recommendations  Read Replies (1) of 217638
 
let me correct your mistake

You mean.. permit you to demonstrate your arrogance, right?

Listen, the Chinese economy WAS BUILT on exporting to the US and MASSIVE TRADE SURPLUSES.

And yes, sure we didn't mind Chinese profits being parked here to finance our unsustainable deficit spending and cheap consumer goods.

It's been mutually beneficial, TO AN EXTENT.

We did the same thing with Europe and Japan since WWII. But we can't do it anymore.

If the Chinese economy didn't depend so heavily on exports to the US, Bejing wouldn't be permitting their Yuan to devalue by pegging it against the USD.

Countries that run trade deficits SHOULD have their currencies devalue in order to restore trade balances. Countries profiting from those trade imbalances, who arbitrarily peg their currency to that of their target market are engaging in an act of mercantilism.

China has more than 3 times the population of the US. Which means that the average Chinese people only has to consume 1/3 that of the average American to achieve a satisfactory balance of trade.

Debasing the Yuan to maintain their export advantages is just as reckless as the Fed undertaking QE2.

Hawk
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